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Venturing into the unknown with strangers: Substitutes of relational embeddedness in cross-border partner selection in venture capital syndicates
Meuleman, Miguel Jääskeläinen, Mikko Maula, Markku V.J. Wright, Mike
Meuleman, Miguel
Jääskeläinen, Mikko
Maula, Markku V.J.
Wright, Mike
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Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
2017
Journal
Journal of Business Venturing
Book
Publication Volume
32
Publication Issue
2
Publication Begin page
131
Publication End page
144
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Abstract
Syndicating with prior partners through relationally embedded ties may be widespread, but not always optimal when investing across borders especially if few prior partners operate in the focal market. However, the substitutes of relational embeddedness for trust creation in cross-border partner selection are poorly understood. We develop and test a model of how relational embeddedness interacts with structural embeddedness and legal and normative institutions and how relational embeddedness and these three substitutes jointly affect cross-border partner selection in venture capital syndicates. We test the hypotheses in the context of cross-border venture capital syndication in 12 European countries. Our findings based on a case-control analysis suggest that although relational embeddedness is a key driver of future partnering, structural embeddedness and trust generating institutions such as high quality legal frameworks and industry associations facilitate cross-border partnering and diminish the need to rely on relationally embedded ties in cross-border partner selection.
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Keywords
Entrepreneurship, Venture Capital